Tax and employee benefits; FIVE things you might not have known!
At £250bn (2015/26) PAYE represents approx. 50% of the UK’s total tax take, and its climbing.
£3.9bn of this comes from forms P11D (up 5% on 2014/15). For comparison Inheritance Tax was only £5.1bn.
So FIVE facts about P11Ds based on 2015/16 (the latest year HMRC have published data)
· The benefit that appears on P11Ds most often is Private medical and dental with over 2.4m people in receipt
· BUT the top benefit in terms of tax and NIC collected is Company cars with over 50% of total receipts (£2.1bn out of £3.9bn). This rises to over 60% when private fuel is included.
· Company cars, private fuel, private medical and dental account for over 85% of total P11D tax receipts.
· The number of people with private fuel benefit has been falling over the last 10 years from 330,000 to around 180,000.
· The tax and NIC liability relating to other benefits has remained broadly static.
So what does the 2017/18 season hold – will the total tax & NIC take from benefits start to rise because of the complex Optional Remuneration rules and huge hikes in company car tax? Or will these changes ultimately be self defeating and revenues fall as businesses and employees opt out?